The paper analyses the reasons for Japan's persistently low inflation since the bursting of the Japanese bubble economy … (low inflation conundrum). It is shown that Japan experienced a structural break from a high-growth period with relatively … high inflation to a low-growth period with exceptionally low inflation since the early 1990s. We show based on a stylized …

stronger bargaining position when they try to prevent a cut in money wages. If inflation is so low that some money wages have … to be cut, workers stronger bargaining position requires higher unemployment in equilibrium. However, inflation is more … stable when money wage rigidity binds, providing an incentive for monetary policy makers to choose a low target for inflation …

consider the implications of a risk premium that arises from endogenous market segmentation driven by variable inflation rates …. In the absence of autocorrelation in inflation, the risk premium is constant. If inflation is correlated, however, the …

The effect of a permanent change of inflation on the distribution of wealth is analyzed in a general equilibrium OLG … of inflation results in a lower stock market participation rate; in addition, the distribution of wealth becomes more … anticipated inflation are considerably lower than in Imrohoroglu (1992). …

case of prevailing inflation, there is a mismatch between the nominal interest rate that is a discounting factor for all …

-term nominal bonds and costly inflation. Our model features two transmission channels of monetary policy: a Fisher channel, arising … from the impact of inflation on the initial price of long-term bonds, and a liquidity channel. The Fisher channel gives the … prices and thus relax borrowing limits. The result is optimal inflation front-loading. Numerically, we find that optimal …

prototypical framework is that voters discount their memories about unemployment and inflation at a constant rate. Yet starting …